The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Kraken, a major cryptocurrency exchange, alleging it operated without proper registration as a securities business in the United States. This action positions Kraken alongside Coinbase and Binance, which have faced similar accusations from the SEC.
The SEC’s lawsuit against Kraken specifically accuses the exchange of commingling customer and corporate funds while functioning as an unregistered broker, dealer, and clearing agency. The regulator pointed out the trading of various tokens it considers securities, highlighting Kraken’s involvement in their promotion.
Notably, the lawsuit claims that Kraken created significant risks by mixing up to $33 billion in customer crypto with its corporate assets, sometimes even utilizing customer cash for operational expenses. Kraken, headquartered in San Francisco, has responded firmly to the allegations. The company disagrees with the SEC’s complaint, maintaining that it does not list securities and plans to vigorously defend its stance.
Kraken argues that the SEC’s continued legal actions against crypto exchanges lack clear legal backing and a defined path for registration, asserting that such regulatory actions harm American consumers, stifle innovation, and damage the global competitiveness of U.S. businesses.
Kraken disagrees with the SEC’s claims, insisting that it doesn’t list securities and plans to defend its position. The exchange criticizes the SEC’s approach as harmful to innovation and market competitiveness in the U.S..
This lawsuit is part of a larger trend of regulatory scrutiny on cryptocurrency exchanges by the SEC, signaling increased efforts to enforce compliance with securities laws in the crypto industry.
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